China Will Be Absent From The Global Central Bank'S Annual Meeting
The global central bank will gather again in Jackson, Wyoming, August 26th to hold a regular annual meeting.
Federal Reserve Chairman Bernanke will present the economy and the "central bank party".
currency
An important speech on policy.
Bernanke's words and actions will affect the global nerves as the global economy slows down, the market worries about the two bottom of the US economy deepens and the global stock market suffers a "stock disaster".
However, the US inflation expectations are rising, and the third round of quantitative easing (QE3) is struggling. The "reverse operation" will become the "last straw" of Bernanke curve saving the nation.
Or "twist operation".
Jackson city in August 26th last year
Central Bank
At a regular annual meeting, Bernanke suggested that the Federal Reserve would launch the second round of quantitative easing to avoid a two dip in the US economy.
More than two months later, the Federal Reserve announced the purchase of US $600 billion treasury bonds.
At present, many economic data in the United States "fail to win", the stock market volatility, unemployment increased, gold soared, and the US economy continued to slump, so investors' expectations of the QE3 policy launched by the Federal Reserve began to heat up.
The focus of this year's Jackson annual general meeting of the global central bank will still be whether the gloomy global economy needs more easing policies.
Expect to go higher, but the threshold of QE3 is not good enough to enter, because the larger the scale of the balance sheet is, the more difficult it will be to exit, and the public's expectation of inflation will also rise.
Republican presidential candidate Rick Perry even said that if Bernanke printed money again, it would be treason.
According to the July CPI data released by the US in August 18th, the ratio rose 0.5%, exceeding the previous 0.2% expectations.
Marc Chandler, head of global monetary strategy, an old investment bank BBH founded in 1818, believes that the current high inflation is an obstacle if the Federal Reserve wants to implement QE3.
According to the financial times,
Bernanke
The option will be some form of "reverse operation", that is, not expanding the scale of the balance sheet, but extending the duration of its holdings.
Selling short-term treasury bonds and buying long-term treasury bonds further push down the yield of long-term bonds.
This method not only gains the benefits of quantitative easing, but also eliminates the risk of expanding the balance sheet. The United States used this method in 60s of last century.
CNN pointed out that the "twist operation" would be Bernanke's last straw.
China absences protest?
And this year's meeting is a bit of a concern.
Earlier, a number of sources said China would be absent from the central bank's annual meeting, which prompted analysts to ponder that it might be a silent protest against the Fed's loosening of its monetary policy.
At present, the focus of the global market is focused on the outcome of this meeting, mainly whether the chairman of the Federal Reserve Bernanke will announce a new round of quantitative easing measures.
Analysts pointed out that once quantitative easing becomes the normal monetary policy of the US Federal Reserve, China will continue to bear the import inflationary pressure brought about by the high international commodity prices, the impact of external liquidity and the risk of shrinking 3 trillion foreign exchange reserves.
In some economists' view, the Fed's currency spamming is the root cause of the financial crisis.
Xu Xiaonian, a professor at the China Europe Business School, pointed out bluntly that "the Great Depression of last 30s and the root cause of this financial tsunami are all in the Fed's monetary policy."
The Fed's ultra-low interest rate and excessive liquidity supply created the last financial bubble and the financial bubble. "
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